Official Foreign Exchange Intervention

Jorge Canales Kriljenko, Cem Karacadag, Roberto Guimarães-Filho and Shogo Ishii

No 2006/001, IMF Occasional Papers from International Monetary Fund

Abstract: Despite increasing exchange rate flexibility, central banks in emerging markets still intervene in their foreign exchange markets for several reasons. In doing so, they face many operational questions, including on the degree of transparency and the choice of markets and counterparties. This paper identifies elements of best practice in official foreign exchange intervention, presents survey evidence on intervention practices in developing countries, and assesses the effectiveness of intervention in Mexico and Turkey.

Keywords: OP; intervention; central bank; order flow; exchange rate misalignment; intervention policy; intervention objective; movements to inflation; equilibrium exchange rate; Exchange rates; Currency markets; Foreign exchange intervention; Exchange rate arrangements; Eastern Europe; Global (search for similar items in EconPapers)
Pages: 52
Date: 2006-03-02
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